A factory manager is planning to manufacture an electronic part. The fixed cost of operation is estimated at $35,000 per month while the variable cost is $30 per unit. The selling price will depend on how much will be produced and sold and is determined by the relationship, price per unit, p = $170-0.03D, where D is the quantity produced and sold. Answer the following three questions: LED 1. Determine the monthly quantity of production that will maximize the total profit. OA. 2,833 OB. 4,666 OC. 1,167 OD. 2,333 2. Determine the maximum total monthly profit. OA. $163,333 OB. $120,843 OC. $233,323 OD. $128,333 OE. $198,323 3. What is the average cost per unit at a production quantity of 1,555 units per month? OA. $30.00 OB. $52.51 OC. $70.84 OD. $123.35
A factory manager is planning to manufacture an electronic part. The fixed cost of operation is estimated at $35,000 per month while the variable cost is $30 per unit. The selling price will depend on how much will be produced and sold and is determined by the relationship, price per unit, p = $170-0.03D, where D is the quantity produced and sold. Answer the following three questions: LED 1. Determine the monthly quantity of production that will maximize the total profit. OA. 2,833 OB. 4,666 OC. 1,167 OD. 2,333 2. Determine the maximum total monthly profit. OA. $163,333 OB. $120,843 OC. $233,323 OD. $128,333 OE. $198,323 3. What is the average cost per unit at a production quantity of 1,555 units per month? OA. $30.00 OB. $52.51 OC. $70.84 OD. $123.35
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:A factory manager is planning to manufacture an electronic part. The fixed cost of operation is estimated at $35,000 per month while the variable cost is
$30 per unit. The selling price will depend on how much will be produced and sold and is determined by the relationship, price per unit, p = $170 -0.03D,
where D is the quantity produced and sold. Answer the following three questions:
1. Determine the monthly quantity of production that will maximize the total profit.
OA. 2,833
B. 4,666
O C. 1,167
OD. 2,333
2. Determine the maximum total monthly profit.
A. $163,333
B. $120,843
C. $233,323
D. $128,333
OE. $198,323
3. What is the average cost per unit at a production quantity of 1,555 units per month?
OA. $30.00
B. $52.51
OC. $70.84
D. $123.35
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